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0 pointsetothepii1y ago0 comments

I'm interested in why you want to do this? What is the goal you are trying to achieve? Why would you not do this with salaries? Will there be some people paid more than others that do different roles? If so, why would their profit shares be the same? Who decides on war chest size? Ownership is an interesting word, because as you say if it was ownership then when an employee leaves they still get a share of profits and surely they could sell (otherwise it's not ownership). I've wondered myself about whether I should have some sort of union but what I really mean is an alternate reporting line to hear about problems. My suspicion is that there's a lot of what founders think of as profit that isn't really profit. My founder salary is probably around 25% of what I'd need to be willing a job. I'd everyone at the company did this we'd have a lot of extra "profit" to share out but it isn't real profit.

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t-writescode1y ago

These are some great questions! I'll work through them one-by-one.

> (edit: sorry, I missed this one!) why you want to do this?

I believe in pay transparency and paying people for the value they bring to a company. I don't like it when there's a call center with everyone making a dollar above minimum wage, when they take the pain of all the poor decisions people who make 5-10x what they do made.

> What is the goal you are trying to achieve?

A greater alignment to the earnings someone makes for the company and their earnings out of the company.

> Why would you not do this with salaries?

I believe a salary is a promise, something that can be consistently relied upon. Profit sharing is above and beyond that.

> Will there be some people paid more than others that do different roles?

Since a salary is a promise, yes. It also allows for more tenured and skilled employees to "grow" in the company. Generally a more senior person has more responsibilities and my promise to them should correlate well with that.

> If so, why would their profit shares be the same?

Undecided

> Who decides on war chest size?

Probably a collection of employees, including the CEO, and it would be the sum of company expenses for a certain number of years, including cost of living adjustments.

> but what I really mean is an alternate reporting line to hear about problems

I hadn't considered that as a use of a union and I think I like it. I should think on this more.

> My suspicion is that there's a lot of what founders think of as profit that isn't really profit. (and the added part about you underpaying yourself)

Probably! In my context regarding profit sharing, I am thinking that everyone is making an appropriate salary already - before that, it's not really profit. Admittedly, given the structure, the official salary would probably be a little below market rate; but again, that's just the promise of minimum payment and when profit sharing went into full swing, I would like to think it would increase those numbers.

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